Producers in the U.S. were more optimistic last month versus the month before according to the latest Purdue University/CME Group Ag Economy Barometer. The October barometer reading of 136 was 22 points higher than the prior month, which was the lowest reading for the survey since 2016.
The producer sentiment jumped back up from the September drop, and people at Perdue University credit this to recent trade negotiations. Of the 400 producers surveyed, the results show they became more optimistic about both current and future conditions.
The barometer’s two sub-indices both increased in October; the Index of Current Conditions rose 19 points to 115, and the Index of Expectations rose 24 points to a reading of 146.
The principal investigator for the survey, James Mintert, says they see continuous variations in readings from month-to-month. Adding that it could be because of the major swings in commodity prices, along with the heated trade negotiations between Canada, the U.S. and Mexico, that finally wrapped in early October.
The survey asked producers if they believed the USMCA would relieve their concerns over farm income within the next year. While just over 60 per cent of producers said the agreement would at least somewhat relieve their farm income concerns, 25 percent of producers said it would not.
While just over 60 percent of producers said the agreement would at least somewhat relieve their farm income concerns, 25 percent of producers said it would not.
As far as crop prices for the next year, farmers continue to believe the end result could be positive. When asked about their expectations for U.S. corn, soybean, wheat, and cotton prices in the next 12 months, in each case, more producers said they expect to see higher prices.
For corn, soybeans and wheat, the ratio of producers expecting higher prices to those expecting lower prices was just over 3 to 1.
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